Hay Group: 5 key challenges facing UK businesses

21 April 2015 Consultancy.uk

As UK businesses are trying to maintain high performance in the changing business environment, they are faced with five key challenges, research by Hay Group shows. According to the firm, an engaged and enabled workforce is needed to counter the issues of productivity, innovation, collaboration, transparency and business agility. As such, businesses should view their employees and their engagement as critical to the future of their business.

Global management consulting firm Hay Group recently released a new report, titled ‘Engaging hearts & minds: preparing for a changing world’, in which it highlights the challenges businesses face in the changing world. The business environment as we know it is being transformed by six megatrends* that change how people work, what they care about, and how to motivate them to perform.

Hay Group’s UK research, which comprised responses from 500,000 UK employees from 100 organisations, shows that UK businesses are faced with five key challenges over the next fifteen years, as a result of the megatrends, that need to be addressed to maintain a high-performance now and in the future.

According to the firm, this will depend on an engaged and enabled workforce, yet engagement and enablement levels in many UK businesses have not improved since 2008. “The business environment is rapidly changing.  Our research shows that many companies don’t currently have the right strategies in place to respond to the challenges this brings through arguably their most critical asset - their people,” explains Martin Palimeris, Senior Consultant at Hay Group.


To keep up with the changing business environment, collaboration will be required: bringing together teams, functions, organisations and even competitors to reach solutions. Hay Group’s research shows that although 80% of UK organisations place ‘team-working’ amongst their strengths, 52% of employees says their teams are not adequately supported by other departments. In addition, 42% says that cooperation and sharing of ideas and resources is not encouraged in their company. “Organisations need to make sure they have the right platforms and processes in place to support collaboration and that this is encouraged at a senior level. Fail to do so, and they risk leaving employees feeling frustrated and disengaged,” says Palimeris.

The second challenge facing UK businesses is innovation. 46% of respondents say their organisation is not innovating the way work is done and 41% say they do not feel encouraged to try new ideas and ways of working themselves. Palimeris explains: “Many organisations are great at creating new products for their customers but fail to replicate this innovation internally. Companies need to think about how they encourage and incentivise innovation. This may depend on them putting processes in place for employees to learn from colleagues across the business, or linking reward and recognition to innovation alongside performance.”


Productivity is also seen as a key challenge, with half (54%) of employees saying that staffing levels are inadequate in their business area. According to Hay Group, productivity improvement depends on innovation, however, “there is a fine balance for companies to strike between this and keeping people focused on their day-to-day business operations.” The training of staff, introduction of digital technologies and improvement of employee-wellbeing can also contribute to improved productivity.

With the increased use of digital technology, comes more transparency: it is easier for employees to hold businesses accountable and at the same time promote their skills and find new jobs. As a result, businesses should be open and honest about how they reward, manage and develop their people. The research shows, however, that 53% of employees believe they are not paid fairly for the work they do and 49% say they do not have a good idea of the possible career paths available to them.

The last challenge is business agility, which, according to Hay Group, is hampered by slow decision making: 59% of respondents express their concern about the speed of decision making at their company. To help employees deal with the changing business world, continuous training and clear communication are critical, however, the research shows just over a third (37%) of employees say they get enough time for training, and 43% say their company does not communicate openly about change.

Martin Palimeris, Hay Group

The firm states that although these challenges are painting a “bleak picture for businesses going into 2015 and beyond”, many businesses are already viewing employee engagement as critical to future business success. “The successful organisations will be those that realise their employees are a unique asset and can help them meet the challenges both now, and as they intensify in the future,” concludes Palimeris.

* The six megatrends are: globalisation 2.0, environmental crisis, demographic change, individualism, digitisation and technological convergence.


More news on


Project management industry adds £156 billion of value to UK economy

15 April 2019 Consultancy.uk

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.


Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”